Will Coney Island’s Surf Ave Become a Mecca for Franchises?

Coney Island, the birthplace of the hot dog and the enclosed amusement park is famous for its quirky authenticity, but it’s about to look and taste more like Anyplace USA. Three national franchises– Applebee’s, Johnny Rockets and Red Mango–have signed leases for the north side of Surf Avenue.

Broker Joe Vitacco tells ATZ, “We rented 8,000 square feet to the Johnny Rockets franchisee. He will use 6,000 square feet for the Johnny Rockets and the remaining 2,000 square feet for another national franchise, Red Mango.” The building next door, 1217, will be built out to the lot-line on Surf for Applebee’s, he said. The restaurants will activate long vacant properties next to Stillwell Terminal, which already has a Dunkin Donuts/Baskin Robbins and a Subway and is getting a Checkers hamburger chain. Is the north side of Surf Avenue destined to become a mecca for franchises?

Red Mango is a frozen yogurt franchise started “many, many spoons ago” (in 2007) in Los Angeles that now has 190 locations nationwide. According to a company press release, it is one of the fastest growing retailers of all-natural nonfat frozen yogurt and fresh fruit smoothies. Johnny Rockets touts itself as “The Original Hamburger” though it was founded in 1986, also in L.A. According to their corporate website the chain has “about 300 corporate and franchise-owned restaurants in 30 states and 16 countries, including 30 Six Flags amusement park locations and 11 Royal Caribbean cruise ships.” In the New York area, the store can be found at 56th Street, South Street Seaport and Yankee Stadium and in Glendale and Forest Hills in Queens, as well as in New Jersey at Newport Centre Mall and in Hoboken. Applebee’s has almost 2,000 locations nationwide and the franchisee already owns 40 restaurants in the New York area.

For the record, the franchisees’ leases are with the individual property owners of 1217 and 1223 Surf Avenue and NOT with Thor Equities. Thor CEO Joe Sitt does not own any property on the north side of Surf east of Stillwell Avenue. Thor’s holdings are on the south side of Surf. The news about Johnny Rockets and Applebee’s has long been rumored because franchisees had first looked into renting Thor Equities vacant new building at Surf and Stillwell, where prices are said to be sky high. Rents on the north side of Surf are about a third as much as Thor’s properties on the south side, a source tells ATZ, with a space on the north side renting for $75,000 and a comparable one in Thor’s building with an asking price of $250,000.

Across the street is Nathan’s, which got its start in Coney Island in 1916 and whose original location is a year-round tourist destination. “In total, Nathan’s products are marketed for sale in over 40,000 locations,” according to the company’s website. Also on the south side of Surf Avenue is Popeye’s Chicken, which is popular with locals and whose franchisee owner has been in business year-round in Coney Island for nearly thirty years.

Vitacco has been actively marketing properties in Coney Island to potential franchisees and independent restaurateurs alike, as well as to other businesses, for many years. It has been a tough sell, with 14 months of red tape at 1223 Surf, which is owned by Fox 18 Realty, LLC, due to the property being adjacent to the MTA. Hooters, Outback Steak House and a seafood restaurant are on his get list. “What would you like to see?” he asked when we said we weren’t a fan of franchises.

How about a club with a wave-riding machine? Turns out Body Glove Swimwear had come to him with an idea for a cafe, retail and surf machine, but nothing ever came of it. In addition to an all-season surfing venue, ATZ’s Big Wish List for the New Coney Island includes a pinball arcade museum, Fascination, frozen custard and a Mangels Whip ride. “The reason it is better to have franchisees is the franchise company has to approve the area, location and lease,” says Vitacco, who believes that Coney Island is a fantastic location. “They have done all of their homework and are experts at analyzing a location.”

While some of our Coney Island friends approve of any new business coming to vacant land and the jobs that it will create, others are critical: “At least Johnny Rockets sort of fits the vibe. But who needs a fake diner when there’s a real one?! (Tom’s),” says Coney Island regular and writer Tara Cox. “In my personal vision for Coney, they should give small, unique business owners the chance to thrive and keep the spirit alive. The whole area will benefit. And what a novelty it would be — a land where there’s only small, interesting and personal businesses.”

Until the early 1980’s the north side of Surf Avenue was home to individually-owned penny arcades and a variety of rides including bumper cars, carousels and even a Jumbo Jet-style coaster. Philips Candy Store, now located in Staten Island, was the anchor of Stillwell Terminal from 1930 until 2000 when the terminal was rebuilt and they had to move out. By the time the last ride– Coney Island’s B & B Carousell —closed in 2005, the north side was known as the wrong side of Surf Avenue to locate a business because of the lack of foot traffic. It was mostly furniture stores named after amusement parks. Rides aren’t about to make a comeback due to the high rent, but things began looking up last summer with the opening of the popular Grimaldi’s Pizzeria on the north side of Surf.

Some kind of formula business restriction such as the one in San Francisco, which bans chains in some neighborhoods and regulates them almost everywhere else, would create opportunities for small, independent businesses and prevent Surf Avenue from becoming a strip of franchises. During the hearings leading up to the July 2009 rezoning, a number of individuals and organizations including the Pratt Center for Community Development recommended adopting a formula business restriction policy within Coney East to prevent national retailers and fast food restaurants from locating there. Of course that didn’t happen because the zoning was written to attract these very businesses to Coney Island.

This is Sad – North side should be reserved for small business with reasonable rents – Franchises can and should pay higher rent if they want to be here – same as Taxing the rich why shouldn’t they pay higher rent?- franchises are worth billions – plus we need small businesses to keep part of Coney’s character – whey can’t we have a balance?

The atmosphere will be dependent upon the architectural and signage regulations. When 42nd Street was revitalized and rebuilt, zoning required the new architecture present varied facade surfaces (even in large buildings with contiguous spaces behind a multi-design facade) and super-signage – all retain the feel of the place. It is one big mall, but it is still a night-time experience. Surf Avenue is going to end up like Clifton Hill in Niagara Falls. It’s fun for the day, but not very unique. Hopefully, C.I. will get a haunted house like the myriad that line Clifton Hill or a serious Fun-house. Both would offer year-round entertainment and could be a magnet for birthday parties. Paintball or a great wolf water park could be nice as well. It would certainly draw the people in who otherwise would drive to Jersey for a similar attraction. I would argue that the enclosed amusements belong exactly on the north-side of Surf Avenue.

My theory is that chains are for people with no originality and no ability for independent thought. They take all the guess work out of ordering food and dumb it down to the lowest common denominator and then standardize that LCD so that it doesn’t matter if you’re in Little Rock, AK, Oklahoma City, OK, Walla Walla, WA you can always get what you’re used to without having to take the risk that you might get something you might not like and somehow, “damage the brand”

Yeah, let Coney Island rot for another 40 years just to keep “chains” out. We keep franchises out and get furniture stores there, or bus depots, or rat-infested lots. But victory is declared, we keep chains out!

Coney Island had been in a race to the bottom ever since Steeple Chase was demolished. Out of all it`s glory only 3, countem 3, land mark rides remain. I lived on West 35 in the late 50s. Where`d all the middle class housing go!. I drove for P.D.Q. across from the train on Stillwell, After the military I tried to get an apartment on Surf Avenue. I was told I made too much and did not qualify, What ??? Drove Gypsy car service and made too much to live on the beach ?? The place may be different now. I`ve been out of state since 85, but what I`ve seen, and heard from friends after Sandy, I don`t know. I do Know New Money can`t hurt. Did the Brooklyn Cyclones hurt ? Did the Bklyn. Nets ? Would you complain if new rides were being built ? I think not, even though a bigger or faster ride may and will siphon money from the older ones. New Money, not donated money, not New York Government Strings Attached Money, Not Obama Strings Attached Stimulus Money, but good old fashioned investments are what is needed to bring in YEAR ROUND business to this once thriving neighborhood.

I was at Coney Island yesterday and noticed that the sign for the Shore Theater is gone. Do you know if it got blown off by the storm, taken down in anticipation of the storm, or taken down because there are plans for doing something to the building? Also, the streetlevel storefront (Kansas Fried Chicken a long time ago) was opened up to air out (it *reeked* of mold even from a few feet away)…Do you know if that storefront is going to be rented out or if the landlord is simply trying to air it out before scary things begin growing inside?

Thanks, as always, for all your updates and historical info about Coney Island. I love your blog!

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